Retail Earnings On Track For Worst Quarter In More Than Three Years

by MR Magazine Staff

If you thought the fourth quarter was tough on retailers, brace yourself for an even more dismal first-quarter report card. With roughly two-thirds of the fiscal quarter in the books for most chains, Retail Metrics expects the sector’s earnings to fall 6.8 percent. That would mark the worst three-month performance since the final quarter of 2013, when profits fell 7.1 percent, according to the firm’s data. Revenues are also expected to be their weakest since the fiscal 2013 fourth quarter. They’re seen rising just 1.6 percent, compared with a 1 percent gain during that period. Retail Metrics’ data is based on the historical and expected performance from 113 companies. “It has been a cruel [first quarter] for the industry,” Retail Metrics President Ken Perkins said in a report. Indeed, the year kicked off with a spate of bankruptcies that have put the industry on track for the greatest number of Chapter 11 filings since 2009. Nine retailers filed for bankruptcy in just the first three months of the year — reaching halfway to 2009’s total, according to AlixPartners consulting firm. Many of the chains that have filed or are expected to file had been purchased by private equity firms that saddled them with debt, AlixPartners found. See more at CNBC.